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Third Party Bad Faith Action should be dismissed not abated when pre-maturely filed in underlying negligence action

With Carri S. Leininger, Esq.

On January 3, 2018, the Third District Court of Appeal held that the trial court erred in abating, rather than dismissing a third party bad faith claim filed in the underlying negligence action against the insured. See GEICO GENERAL INSURANCE COMPANY, v. KATHERINE MARTINEZ, 43 Fla. L. Weekly D86a.

The underlying Plaintiff, Katherine Martinez, filed a negligence action against GEICO insured, Diana Guevara, for injuries she sustained in an automobile accident with Ms. Guevara. Martinez then sought to amend her complaint to add GEICO as a party defendant, and add a third-party bad faith claim against GEICO. The trial court granted the motion.

GEICO moved to dismiss the third party bad faith count. Martinez conceded that the bad faith count was premature because, pursuant to the non-joinder statute, the bad faith claim had not yet accrued and would not accrue unless and until Martinez obtained a settlement or verdict against Guevara. However, the trial court denied GEICO’s Motion to Dismiss, and instead, abated the bad faith action.

GEICO filed a petition for writ of certiorari, seeking review from the Third DCA. The Third DCA granted the petition and quashed the order denying the Motion to Dismiss. The court held that, pursuant to the non-joinder statute (section 627.4136, Florida Statutes), the bad faith claim had not yet accrued.
The Third DCA noted that section 627.4136, would be rendered meaningless if the court were to simply abate, rather than dismiss, the un-accrued and premature third party bad faith claim. Under subsection (2) of section 627.4136, Martinez has no interest in the GEICO policy until the conditions precedent in subsection (1) of statute had been met. Until then, “Martinez had no standing to file or maintain a third party bad faith claim.”

Many Plaintiff attorneys will agree to abate but not dismiss the bad faith case. Defense attorneys should advocate for dismissal. This case does an excellent job of explaining why dismissal is required under Florida law.

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